Under the partition plan provided by the Indian Independence Act of 1947, Kashmir was free to accede to India or Pakistan.

The Maharaja, Hari Singh, wanted to stay independent but eventually decided to accede to India, signing over key powers to the Indian government - in return for military aid and a promised referendum.

Since then, the territory has been the spark for two of the three India-Pakistan wars: the first in 1947-8, the second in 1965.

In 1999, India fought a brief but bitter conflict with Pakistani-backed forces who had infiltrated Indian-controlled territory in the Kargil area.

How dangerous is the Kashmir dispute?

From potentially being one of the most dangerous disputes in the world - which in the worst-case scenario could trigger a nuclear conflict - the recent warming of relations between Delhi and Islamabad has led to less sabre-rattling over the Kashmir dispute.

In 1998 India and Pakistan both declared themselves to be nuclear powers with a string of nuclear tests.

Put simply, many people in the territory - especially in the Muslim-majority Kashmir valley - do not want it to be governed by India. They would prefer to be either independent or part of Pakistan.

The population of the Indian-administered state of Jammu and Kashmir is over 60% Muslim, making it the only state within India where Muslims are in the majority.

The sense of alienation from Delhi is especially to be found among young people in the Kashmir valley, a problem which has been made worse by high unemployment and what many see as heavy-handed tactics from Indian paramilitary forces in stifling their protests.

Although the insurgency today may not be so vigorously fought as it was in the 1990s, the scope for violence to re-surface - as happened in 2010 - is never far away.

While violent demonstrations and curfews no longer take place on a daily basis, this "tinder box effect" on the streets of Srinagar and other towns in Indian-administered Kashmir - in which angry crowds take to the streets often without much notice - is still a feature of life.

What's changing now?

For much of the 1990s, separatist militancy and cross-border firing between the Indian and Pakistani armies left a death toll running into tens of thousands and a population traumatised by fighting and fear.

Jammu and Kashmir is the only state in India where Muslims are in the majority

Early in 2012, Islamabad cut by half the administrative funds it issues to groups that still maintain offices in Pakistani-administered Kashmir

At the same time it offered a cash rehabilitation package to former fighters to abandon militancy

One thing that has not changed, however, is the Line of Control (LoC) which divides Kashmir on an almost two-to-one basis: Indian-administered Kashmir to the east and south (population about nine million), known by India as Jammu and Kashmir state; and Pakistani-administered Kashmir to the north and west (population about three million), which is labelled by Pakistan as "Azad" (Free) Kashmir. China also controls a small portion of Kashmir.

The warming of relations between India and Pakistan has corresponded with less violence in Kashmir

An end to the violence and uncertainty in Kashmir would also be widely welcomed in India and Pakistan - and not only by those weary of the fighting or those who see it as a hindrance to the economic development of the South Asia region.

However, a diplomatic solution has escaped both sides for more than 60 years, and there are no signs of any new proposals yet.

Furthermore, both governments face powerful hardline groups within their own countries who will be carefully monitoring the talks to make sure concessions they deem to be unacceptable are not offered to the other side.

Kashmir experts say that the new mood in Indian-administered Kashmir is less supportive of the insurgency and more in favour of civil liberties and human rights.

India says that the way forward is through elections: It says that in recent years people on the Indian side of the territory have voted enthusiastically in assembly and council polls.

In July 2012 evidence of warmer relations between India and Pakistan was highlighted by Foreign Affairs Minister SM Krishna who praised Islamabad for its "new mindset" toward India which he said was "frank and candid".

But problems and suspicions remain. India's army and paramilitary forces insist that a few hundred armed militants are still active.